No More Corporate Tax Breaks
Yogi Berra once said: “You can see a lot by just looking.” This is what you see if you look at corporate income tax revenue, as a percentage of GNP, since World War II:
I came up with this chart myself (hold your applause, please), after downloading the data from the White House’s website, here. Corporate income tax revenue has dropped all the way down from 7.2% of GNP at the end of World War II to only 1.2% last year.
Go to a different government website, do a little arithmetic, and you’ll find that corporate profits are now 12.7% of GNP. Some division then tells you that corporations are paying less than 10% of their income in taxes.
Wow. That’s a tax rate that might make even Mitt Romney blush.
Under the Supreme Court’s Citizens United decision, corporations are people. Well, it appears that they are people who pay little or nothing in taxes.
Ben Franklin said: “In this world, nothing can be said to be certain, except death and taxes.” For corporations, though, neither is true.
There is something of a consensus among Washington, D.C. policymakers that corporate income taxes ought to be cut. That seems to be why the Obama Administration, unbidden by the Republicans, stuck in $100 billion in corporate tax breaks (“accelerated depreciation”) into the so-called “compromise” bill that extended the Bush tax breaks for the rich through this year. (A bill that I voted against, by the way.)
That consensus is wrong. Based on this data, the notion of more corporate tax giveaways is laughable. If you care anything about the federal deficit, then corporate income tax revenues need to be higher, not lower.
If we simply returned corporate income tax revenue, as a percentage of GNP, to where it was six years ago in 2006 (2.7% of GNP), then we would reduce the federal deficit by over $200 billion a year. That is roughly fifty times the amount by which the “Buffett Rule” would reduce the deficit.
Fifty times as much.
Why isn’t this all over the newspapers, radio and TV? Why aren’t our so-called leaders saying something about this? As Casey Stengel, Yogi Berra’s manager during most of his playing days with the Yankees, once asked, “Can’t anybody here play this game?”